Oil & European pipelines

see a great map of ALL European pipelines here:

Source EIA

Are Europeans plans realistic?

The European Union announced ambitious clean-energy targets as part of the big climate-change package unveiled this week: It wants 20% of total energy consumed by the 27-nation bloc to come from renewable sources by 2020. That’s up from 8.5% today — in a continent that’s already worked for decades to make clean energy viable. It won’t be easy. 

The EU proposal tackles total energy consumption, including the transport sector, and includes an EU-wide biofuels target of 10% to trim oil consumption. We can leave aside internal European debates on the environmental merits of biofuels, or tax policy which has kneecapped part of the sector, or biofuels economics at a time of costlier feedstocks

Let' s look just at electricity generation, which is where renewables like hydro, wind, and solar really come into play.

The first problem: Europe’s electricity markets aren’t standing still. Demand is still growing, and new capacity is being added, usually through natural-gas fired turbines. So renewable energy has to run just to stay in place — let alone gain ground.

Second problem: Renewables punch below their weight, basically because they don’t generate juice all the time, as nuclear and even coal-fired plants do.

According to the EU statistical pocketbook, the 27 members of the Union had a total installed generation capacity of about 741 gigawatts in 2005. Renewables—including wind, geothermal, and hydropower—made up 24% of the total. Now look at actual electricity production. Those same 27 countries generated about 3,309 terawatt hours. Of that, renewables made up 14%. Less bang for the buck.

Third problem: hydro is renewable energy with a past and a present. But hydro isn’t a growth sector. How important is hydro now? It makes up 18.8% of the EU’s installed capacity, just nipping nuclear. Wind and geothermal make up 5.3% of capacity and 2% of electricity produced. (For all the sunny talk, solar power’s contribution is too small to register in the stats.) So the biggest stress going forward is going to be on the most marginal of Europe’s generation technologies.

Which also still need—despite huge technological advances and rising fossil-fuel prices — government subsidies to be cost-competitive with traditional generation sources. Granted, Europe is trying to address that: If coal and natural gas plants have to really pay for the CO2 they emit, as they will under the stricter carbon-emissions rules for 2013, then the economics of renewable energy get a lot more appealing

Plans to liberalise Europe's energy markets are in disarray

THE European Commission this week called for yet another scheme to promote energy liberalisation after opposition by France and Germany blocked two earlier proposals. In September the European Union's energy commissioner, Andris Piebalgs, offered two paths to a single European energy market. Integrated power companies could either unbundle their gas pipelines or electricity grids into separate companies, or keep them but run them at arm's length.

The idea was to open the European market by making it easier for small energy companies to buy and sell power across Europe, with the hope this would lower prices. Independent network companies would be more likely to upgrade facilities by, for instance, improving cross-border links.

The big energy groups, such as E.ON and RWE in Germany and EDF and GDF in France, argue that big, integrated companies are needed—to bargain with Russian and Algerian gas suppliers, for example. The commission wants opponents to table a third option to promote liberalisation, in a bid to win majority support for liberalisation. The Franco-German opposition bloc includes seven smaller member states such as Austria and Latvia. The liberalisers, led by Britain and the Netherlands, comprise eight members; ten states are undecided.

While all this wrangling goes on in Brussels, the industry is changing shape. Suez, a Franco-Belgian energy group, is merging with France's GDF (the union is due to be blessed by shareholders next year). Other tentacles are also being extended across borders. Enel, Italy's biggest power company, was one of the winners in the epic fight for Endesa, Spain's energy giant, earlier this year. Now Enel is taking a 12.5% stake in a new nuclear power-station being built in France by EDF, the state-owned energy giant, as a way of getting a toehold in the French market. Under an agreement ratified at a Franco-Italian summit on November 30th, Enel also has options to take stakes in future EDF power stations, both gas-fired and nuclear. In return, EDF will be able to participate in some of Enel's projects. So a new cross-border power group is quietly shaping up.

This week the French finance minister, Christine Lagarde, indicated that she would consider selling further shares in EDF, after the sale of 2.5% on Monday. The government now owns just under 85% of EDF and can reduce its stake to 70% without further legislation. But it is still pulling the strings. Much as the commission wants to unbundle generation and distribution, the opponents of liberalisation have a very different view of how the industry should look.

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